a) the interest part of the loan
b) the interest and carrying charges
c) the amount of the loan including interest
d) the original amount owed
In the first time I posted this, everyone said "d", but wouldn't it be "c"?
Can someone please explain??? Why or why not it is d? THANKYOU, 10 pts=best answer
2007-10-26 23:26:57 · 4 answers · asked by Anonymous in Social Science ➔ Economics
A, B, C are incorrect. Interest is a SEPARATE tool used to calculate the accumulated amount for a loan.
D is correct. It's the original amount you started with that is used to find an interest payment.
Remember. The original interest formula is A = P x R x T.
A = The total amount
P = The ORIGINAL amount
R = The rate of interest charged
T = The length of time
2007-10-26 23:29:46 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Principle is d). Principle is the amount borrowed, so it's the amount you're paying that is not interest and it reduces the amount you owe. Anything that includes interest is not principle. Again, principle is the amount of the loan and by definition does not include interest.
2007-10-27 07:59:52 · answer #2 · answered by the Boss 7 · 0⤊ 0⤋
principle amount is the amount u borrow from the bank. but you have to pay interest to the bank.the amount you pay to the bank includes the amount u owed(principle) + interest. This interest is bank's profit.For eg. you borrowed Rs.1000 n u have to pay it back in 1 time(suppose) n not in installments and you also have to pay 10%interest.now 10% mentioned is 10% of the amount you owed i.e. Rs.100. So now your principle amount is Rs.1000 and Rs.100 is your interest amount.What u will pay to the bank is = principle + interest = Rs1100.
2007-10-27 07:19:04 · answer #3 · answered by dhruvi 1 · 0⤊ 0⤋
Do your own homework!
2007-10-27 07:36:40 · answer #4 · answered by sbyldy 5 · 0⤊ 1⤋